Providing certainty and improving performance in the Renewable Heat Incentive

Overview

This consultation was carried out by the Department of Energy and Climate Change. In July 2016, the department merged with the Department for Business and Innovation and Skills to form the Department for Business, Energy and Industrial Strategy.

This consultation seeks views on proposals for the non-domestic RHI relating to longer-term budget management and scheme improvements, including biomass sustainability, air quality and changes to the metering requirements.

Our key proposal for budget management is to use a flexible degression-based system. Under this system tariff reductions for new applications would occur if deployment hits pre-determined triggers. Tests to see whether degression is needed would take place quarterly, and if a tariff reduction is needed, one month’s notice would be given.  We are also asking for evidence on the effect of tariff uncertainty on decisions about whether to install or not. The document sets out an enhanced form of preliminary accreditation that would guarantee a tariff rate as one option that could be pursued if there is evidence that a lack of market certainty is an issue.

We have previously committed to introducing air quality and biomass sustainability requirements into the RHI. This consultation sets out how the compliance regime will operate. On biomass sustainability the consultation outlines the standards Government has chosen to adopt, and proposals on the methods organisations can employ to demonstrate they have met these standards. Two approaches are outlined, with a requirement for large installations to begin reporting in April 2013 and smaller installations in April 2014. 

We are committed to reacting to feedback and constantly improving the RHI. This has resulted in proposals which we believe will improve the scheme, making the regulations clearer, more practical and, in some cases, reducing the administrative burden on applicants. This consultation contains proposals on changes to the metering requirements of the RHI, allowing a more proportionate approach to be taken by Ofgem.